2014 (1) TMI 670 - AT - Service Tax

Demand of service tax - Bar of limitation - Invocation of extended period of limitation - Held that - Once on an issue a show cause notice was issued to the appellant than it was also appellant s duty to inform the Revenue that inspite of earlier show cause notice appellant continued to follow the earlier practice of declaring incorrect value of services in their ST-3 return vis- -vis balance sheets. Revenue cannot imagine that the appellant will continue to follow a wrong practice inspite of earlier show cause notice issued to them - Following decision of M/s Robot Detective & Security Agency vs CCE., Chennai 2008 (12) TMI 141 - CESTAT, CHENNAI - Decided against assessee.

Summary

Issues:
1. Time bar for demand in the present proceedings.
2. Invocability of extended period in the second show cause notice.

Analysis:

Issue 1: Time bar for demand in the present proceedings
The appellant contested the appeal solely on the ground of time bar, arguing that as a private company, their balance sheets filed with the Registrar of Companies under the Companies Act made the extended period inapplicable. The appellant relied on case law to support their argument, citing M/s Nizam Sugar Factory vs CCE, AP case and CCE, Ahmedabad III vs M/s Akshar Chem (I) Ltd. However, the Revenue argued that the theory of universal knowledge, as per CESTAT Bangalore's Order in CCE, Calicut vs M/s Steel Industries, does not make the demand time-barred. The Tribunal examined the case records and held that the demand was not time-barred based on precedents, setting aside the appellant's argument and upholding the Commissioner's detailed findings.

Issue 2: Invocability of extended period in the second show cause notice
Regarding the invocability of the extended period in the second show cause notice, the Tribunal emphasized that the limitation issue involves a mixed question of facts and law. The appellant's duty was highlighted to inform the Revenue if they continued to follow incorrect practices despite earlier notices. The Tribunal noted that the case laws cited by the appellant were not applicable due to differing circumstances. Citing the decision of CESTAT Madras in M/s Robot Detective & Security Agency vs CCE, Chennai, the Tribunal affirmed that the extended period could be invoked in a subsequent show cause notice. Consequently, the Tribunal rejected the appellant's appeal based on the specific facts and circumstances of the case.

In conclusion, the Tribunal dismissed the appeal, emphasizing that the demand was not time-barred and the extended period could be invoked in the second show cause notice based on the specific circumstances of the case. The judgment was pronounced in open court on 10.01.2014 by Mr. H.K. Thakur.